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Laurentian bringing in consultant to explore how to monetize real estate holdings

The insolvent university looking at potentially selling off some of its assets, reviewing its leases against market rates
Laurentian University.

Laurentian University has issued a request for quotations for the services of a consultant related to its upcoming review of its real estate holdings, which aims to study how these assets can be “monetized.”

The RFQ document sheds some light on some of Laurentian’s possible next moves, which include potentially selling its residences to a campus residence operator, the “monetization” of “excess assets,” including land and buildings, and reviewing its third-party leases and comparing them against market lease rates. 

Meanwhile, local citizens are gearing up for a fight to save Laurentian’s greenspaces from potentially being sold off.

The deadline for consultants bidding on the project was initially May 28, but that has now been pushed back to June 1.

The RFQ document said that as part of its restructuring, Laurentian wishes to undertake a review of its current real estate portfolio. 

The purpose of the real estate review is to "investigate the potential to monetize various aspects of LU’s real estate assets in an effort to maximize value for its stakeholders while allowing Laurentian to continue its operations on a go-forward basis, consistent with its strategic plan."

A full list of Laurentian’s expectations for the consultant is below:

  • Reviewing and understanding LU’s current portfolio of real estate and existing restrictions, encumbrances or other limitations on the ability to sell, lease or otherwise monetize the real estate. 
  • Consideration of potential strategies with respect to the monetization of the redundant or potentially excess assets in the real estate portfolio (land and buildings), including the identification of prospective purchasers or categories of purchasers, a proposed process for the solicitation of offers from prospective purchasers and the recommended timeline associated with such process, all with a view to the maximization of value.
  • Review of the third-party leases within the real estate portfolio, including a comparison against market third party lease rates and a recommendation with respect to opportunities to further monetize such leases. 
  • Consideration of other strategies to monetize real estate assets including, for example, selling residences to a campus residence operator and the pros and cons of such a strategy as well as proposed process and timeline. 
  • Inquiries into LU’s current utilization of space and recommendations to optimize space utilization, including opportunities to consolidate and the feasibility of doing so. 
  • Identification of redundant assets in its real estate portfolio or excess assets that could be freed up through space utilization strategies as set out above. 
  • Recommendations with respect to which of the identified potential strategies for monetization should be further explored and suggested next steps. 

Laurentian University announced Feb. 1 it is insolvent, and had filed for creditor protection under the Companies Creditors’ Arrangement Act (CCAA), a move that’s unprecedented in the post-secondary sector.

The university, which had $321.8 million in liabilities as of April 30, 2020, said it would have run out of cash to meet its payroll obligations by the end of February if it hadn’t secured a $25 million debtor-in-possession (DIP) loan through the insolvency process.

Under the auspices of the CCAA, Laurentian is undergoing court-supervised restructuring. That includes massive cuts to its programs and employees, which were made public April 12, as well as the termination of the federation agreement.

After securing another $10-million DIP loan and another four months’ of creditor protection, Laurentian is now in phase 2 of its restructuring, which will last until Aug. 31.

As outlined above, Phase 2 will include a review of its assets and real estate holdings to see if they can be monetized, as well as coming up with a plan to deal with its creditors. 

Those creditors include Laurentian’s terminated employees, who have to join the creditors’ pool in an attempt to receive their severance.


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Heidi Ulrichsen

About the Author: Heidi Ulrichsen

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